ANY QUOTES USED MUST BE ATTRIBUTED TO MURNAGHAN, SKY NEWS

DERMOT MURNAGHAN: Well now, councils and NHS Trusts amongst others are being urged to buy British steel for construction projects they may be involved in to help save the industry. The government says public sector bodies must consider the social and economic impact on the UK before they buy steel from abroad.  Well it’s after heavy criticism of the government’s handling of the crisis but is this too little, too late?   I’m joined now by the Shadow Business Secretary, Angela Eagles, and a very good morning to you.  So we’ve heard it enunciated by your Shadow Chancellor, the Labour policy on this is to buy some time, nationalise to stabilise.  

ANGELA EAGLE: Well we certainly have to make sure that the assets are protected.  Obviously if there’s a buyer coming forwards and we don’t know this yet, then it may well be that we can move forwards with that but in the event of there being no viable buyer then it is really, really important that the government actually protect these assets.  Look what they did in Redcar, they just sat on their hands and destroyed one of the most modern blast furnaces in Europe and the coke ovens went with it which means that there will be no steel making in Redcar again, they must not make that same mistake with the rest of the steel industry.  

DM: But you know this is about a commercial industry and we can talk about the issue of dumping in a moment or two but what could a government do that Tata wouldn’t do?  It is not in the business of losing money, it has been searching the planet for a buyer one presumes and hasn’t found one, how could the government do better?

ANGELA EAGLE: Well look, steel is a cyclical industry, it goes up and down and there are these issues of Chinese dumping that need to be resolved and I wish the government had been much more proactive than they were in the European Union …

DM: But given where we are with this million pounds a day that they say is being lost per day?  

ANGELA EAGLE: But you have to look at the cost of closure and the loss of a strategic foundation industry which is wrapped up in all of our supply chains, 40,000 jobs, many communities in already areas that aren’t booming would be destroyed and it would take generations to recover and huge amounts of money actually to reclaim the land so there will be a cost …

DM: But it could be a long commitment to government owning all or part of the Port Talbot plant?

ANGELA EAGLE: Well it is impossible to know without being in the  meetings that Sajid Javid should be in at the moment.  The issue though is that you have to see how crucial a foundation industry like steel making is to our entire manufacturing supply chain.  We have a Chancellor who used to boast about the march of the makers in the UK, what we have got now is a shrinking manufacturing industry because we’re too narrowly based and we cannot rebalance our economy, we cannot get some of that trade deficit which is now the worst since records began in the 1800s, we can’t get that back on track if frankly we destroy our foundation industries and manufacturing.  

DM: Okay but there is cross-part agreement on how important the industry is but what I want to know is if you share the Business Secretary’s and indeed the whole government’s endgame, whether or not there is government intervention, that ultimately it must be sold, it must be operated by a commercial entity ultimately or wouldn’t your supporters, Labour supporters, say if you turn it round, if the government turns it round and it becomes profitable, well keep it then as a national asset?

ANGELA EAGLE: These are issues that we can talk about when we have saved it, what we have got at the moment is a crisis which has been developing on this government’s watch which they have ignored.  We had the Prime Minister on holiday, the Business Secretary jetting to make an appearance in his black tie in a casino in Australia extolling the virtues of the free market when that board meeting was happening in Mumbai.  We had the trade union community and the local MP who represents Port Talbot area, Steven Kinnock, actually going to Mumbai, that’s where the government should have been.  They should be much more involved in dealing with this issue, it’s in the strategic interests of our country and our manufacturing base to preserve the capacity in the UK both to make and process steel.  

DM: But you did say there that you would look at it once you’d stabilised it, if you stabilised it and started making a profit out of it, you are saying then that a Labour government would consider keeping it?  

ANGELA EAGLE: Look, we didn’t agree with for instance the privatisation of the East Coast Mainline, that was making a lot of profit, I don’t think we should be as ideologically obsessed as this government with having everything in the private sector but much more important at the moment is having a manufacturing strategy which would actually mean that we could plan for these events and ensure that we could manage in the world with a vibrant manufacturing industry rather than expecting market forces somehow just to be like gravity …

DM: Right, that’s interesting, so you are saying you might hold on to the steel industry if you were in power …  

ANGELA EAGLE: Don’t put words in my mouth.  The issue here is saving a strategic foundation industry so that we can expand our manufacturing sector and deal with our trade deficit.  

DM: And if it starts making a profit, why hand that to private investors, why not keep that for the nation?

ANGELA EAGLE: I think at the moment we are a very long way from that happy eventuality but remember that steel is cyclical and these difficult trading conditions will change and we have to deal by the way with Chinese dumping …  

DM: Indeed but could this apply to other cyclical and very important industries such as ship building and aerospace, what would Labour’s attitude to those be if they fall upon difficult and hard times as indeed ship building is, could we buy those?  

ANGELA EAGLE: Conservative governments have nationalised industries, if you think about Rolls Royce for example, that nearly went bust when a Conservative government took it into public ownership, they had it for nearly 20 years before they sold it back into the private sector, it is now one of our leading industries. It’s important that the government is there to shelter and protect when conditions deteriorate in this way, particularly in cyclical industries and they ought to therefore also be there to protect and encourage industries to do the right thing for their own workforce and to invest for the future.  

DM: Let’s talk about tariffs and in particular Chinese production let’s say over the last 10 or 15 years.  You talk there about increased protections against the dumping of in particular Chinese steel, would that go for the clothing industry, for electronics, for plastics, for shoes?  All things that are cheaper in the UK now because of Chinese imports and have put domestic industries up against the wall in some cases, particularly when it comes to clothing and mills?

ANGELA EAGLE: Let’s be absolutely up front here, what we’re talking about with the current situation with steel is unfair trade, dumping at prices below even production costs.  That’s against the World Trade Organisation rules …
DM: But is it fair when you get clothing made in sweatshops by children under school age who are paid we don’t know what per day?  Is that fair trade when it drives a mill town out of business?

ANGELA EAGLE: Well there are very few mill towns left it has to be said in the UK now.

DM: Because of that.

ANGELA EAGLE: If you want to go back to the 19th century, I suppose we can be here all day, we are a …

DM: We can go back to the 1990s.

ANGELA EAGLE: We believe in the Labour party in fair trade and we don’t mind free trade but what we can’t have is unfair dumping at costs below production by a steel industry that is mainly state run in China which are losing billions of pounds of money, wiping out industries in Europe in an unfair way, that’s why we have trade rules and they should be put into effect.

DM: I’ve just got a last question about the national living wage, picked up at something I think you said at a fringe meeting I think at the Labour Conference last year.  You were warning against the government introducing it too quickly, well we’ve got it coming, it’s come in, you think it hasn’t given particularly small businesses room to adjust?

ANGELA EAGLE: Well what I think about the increases in what George Osborne likes to call the Living Wage but is actually an increase in the Minimum Wage, are entirely good.  I think we have to stop and think why so many workers in this country are going to be positively affected by that and we need to do things to ensure we can upgrade our productivity so the workforce can be paid for.

DM: But what about that comment that you didn’t want to see it brought in too quickly and you were thinking about small businesses, we’re talking about care homes and so many other areas.

ANGELA EAGLE: You have to signal these things properly but you also have to realise that when profits are made in industry they need to be shared with the workforce otherwise we end up with what’s known as the hourglass economy where you have lots of people on very low pay at the bottom of a labour market and very, very few people on ridiculously obscenely high levels of pay at the very top.  That isn’t a socially sustainable model and so what we have to have with our economy is an economy that generates better paid, more highly productive jobs and that’s about skills …

DM: All right, that’s for the future but right now we’ve got the £7.20 coming in and a lot of employers  ….

ANGELA EAGLE: Which is of course a good thing.

DM: A lot of employers are saying we’re going to have to shed jobs.  

ANGELA EAGLE: Well we’ll have to see what happens about that.  I would also argue by the way that there is no reason why the increase in the minimum wage should apply only to those over 25.

DM: Okay, Angela Eagle, thank you very much indeed, Shadow Business Secretary, good to see you.